What happens to your investments when you die

Planning ahead

When you make choices about how to invest and manage your money, it’s not always just yourself that you need to think about.

The decisions you make now and how old you are when you die, can affect what happens to your investments and the choices available to the people who inherit them.

Understanding your options, including what assets could be subject to inheritance tax, can give you peace of mind that your loved ones will receive what you want them to. Many people might consider personal and professional advice on estate planning.

Guide to saving inheritance tax

Inheritance tax and estate planning advice

What happens to your HL investments when you die?

Once we’re notified of your death, we will freeze access to your accounts. To find out more about this process, visit our what to do when someone dies hub and the below FAQs.

The people who inherit your HL assets will have different options depending on the account which the assets are held in, and how old you are when you die.

What choices will my beneficiaries have?

Broadly speaking, below are the decisions your beneficiaries will need to make depending on the type of HL account that you hold. You can find full details in our HL Beneficiary Guide to Inheriting Money.

Tax and product rules can change, and the value of any benefits will depend on individual circumstances.

HL Stocks and Shares and Lifetime ISAs

Any beneficiary can choose to:

Have the assets transferred into a HL Fund and Share Account in their own name, or:
Have the value paid out to them as a cash lump sum

Your spouse or civil partner can also choose to transfer the assets into a new or existing HL Stocks and Shares ISA in their own name, using the Additional Permitted Subscription allowance.

HL Self-Invested Personal Pension (SIPP) including drawdown

Any beneficiary can choose to have the value they inherit paid out to them as a cash lump sum. Many beneficiaries will also have the option to transfer the assets into a self-invested drawdown pension in their own name, or exchange the value for a secure income (an annuity).

The tax on any withdrawals will depend on your beneficiaries’ income tax position and how old you are when you die. Usually assets held within a pension are excluded from your estate, so will not be subject to inheritance tax.

HL Active Savings

Any beneficiary can choose to:

Have the value transferred into an HL Fund and Share Account in their own name*, or:
Have the value paid out to them as a cash lump sum

*Beneficiaries can then instruct a transfer of the cash to the HL Active Savings service in their own name and from there choose savings products.

If the money is in a fixed term contract they can either wait until the term is over or access the money early. They would need to check whether there are any penalties to access the money early.

HL Fund and Share Account

Any beneficiary can choose to:

Have the assets transferred into an HL Fund and Share Account in their own name, or:
Have the value paid out to them as a cash lump sum

Why you should make a Will

A Will is a legally binding document that lets you explain what you want to happen to everything belonging to you after you die. You can also nominate someone to carry out your wishes (known as an executor).

If you don’t make a Will, intestacy rules will dictate what happens to your assets, including your HL investments. This can make things difficult for your loved ones and might mean they don’t receive what you hoped they would.

You may wish to use a solicitor to set up your Will, especially if your estate is large or your circumstances are complicated.

Value of a power of attorney

A power of attorney (POA) is a document which legally allows someone you trust to make decisions for you, or act on your behalf until you die.

A lasting power of attorney (LPA) can cover decisions about your property and financial affairs and/or your health and welfare. A health and welfare LPA only comes into effect once you lose mental capacity. A property and financial affairs LPA can come into effect before this if you no longer want to make decisions for yourself.

If you’re married or in a civil partnership and you lose the physical or mental capability to make decisions, you may have assumed that your spouse would automatically be able to deal with your investments and pensions and make decisions about your healthcare. But without a POA they’ll have to apply to the Court of Protection for authority. This can take time and isn’t guaranteed.

To find out more visit Gov.UK.

Losing a loved one

Find out what to do when someone dies, including how to let us know and what your choices are if you’re due to inherit any assets held with HL.

Find out more

Frequently asked questions

Grant of Probate is the legal right to deal with someone’s property, money, investments and possessions (their ‘estate’) when they die. Companies will often need to see proof of this before they distribute any assets. Typically, only the named executor(s) in your Will can apply for a Grant of Probate or a self-nominated administrator (usually your next of kin) if you don’t leave a Will.

In Scotland a self-nominated administrator is known as executor dative and a Grant of Probate is a Grant (or Certificate) of Confirmation.

The person(s) nominated by you as executor(s) or self-nominated as administrator can apply to the probate registry for a Grant of Probate when you die. Once the application has been approved, they will receive a Grant of Probate, or what’s known as Letters of Administration if you didn’t leave a will. At this point they will have authority to sort out your estate.

More information about applying for probate can be found here: www.gov.uk/applying-for-probate.
In most cases we will need to see the original Grant of Probate or Letters of Administration before we can take instructions from the person(s) dealing with your estate.

If the assets at HL (excluding pensions) are worth less than £50,000 and you are not already applying for probate, we will accept a Small Estates Declaration and Indemnity form in lieu of a Grant of Probate. This document is included in the Estate application pack that we send, however, we will require a certified copy of the Will before we can action any instructions.

If you die intestate (without leaving a Will), we will need Letters of Administration from the self-nominated administrator of your estate, unless the value of assets held with HL is below £500.

We don’t need to see a Grant of Probate to distribute assets held in any HL pension account, as these assets will sit outside of your estate.
Yes. We can issue a Declaration and Indemnity form to the executor(s) named in your Will or to the self-nominated administrator(s) of your estate instructing this once we have received your death certificate.

The ‘Declaration and Indemnity form’ can be used to sell non-pension assets for any of these three reasons:
- To hold cash / avoid future market risk
- To be used to pay funeral expenses
- To be used to pay Inheritance Tax
Please note, any funeral expenses are paid directly to the funeral directors and any inheritance tax payments are made directly to HMRC. We will not make any payments directly to the executors or administrators of your estate until we have received sight of the Grant of Probate (or equivalent).